Deregistration of a cooperative society under Section 21A requires clear evidence of fraud or misrepresentation; procedural irregularities alone do not justify cancellation.

JUDGMENT :

AMIT BORKAR, J.

1. Rule. Rule is made returnable forthwith.

2. The present writ petition arises from proceedings initiated under Section 21A of the Maharashtra Cooperative Societies Act, 1960, at the instance of a purchasers who are not members of the petitioner-Society, seeking cancellation of its registration on the ground that the statutory conditions for registration were not satisfied at the time of its incorporation.

3. The facts and circumstances giving rise to the present writ petition, as pleaded by the petitioners, are briefly set out hereinafter:

4. The immovable property bearing Survey No. 109/4 situated at village Baner, Taluka Haveli, District Pune, forms the subject matter of the present proceedings. On 10th March 2010, a Development Agreement came to be executed by the original landowners in favour of a developer, authorising the said developer to undertake construction and development upon the said property. Pursuant thereto, on 2nd February 2013 and 27th February 2015, the Pune Municipal Corporation issued Completion Certificates in respect of the residential building constructed upon the said land. Thereafter, the petitioner-Society, comprising of the purchasers of residential flats in the said building, came to be duly registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 (for short, "the MCS Act") on 1st April 2016.

5. Subsequently, in the year 2019, the developer handed over possession of the common areas and office records pertaining to the Society to the petitioner-Society. However, on 2nd September 2020, the original landowners executed conveyance deeds in favour of respondent Nos. 5 to 7 in respect of six flats situated in the said building, without disclosing the same to the petitioner- Society and without seeking its consent or informing it in any manner. Upon becoming aware of the said transactions, the petitioner-Society, in the year 2021, addressed a communication to respondent Nos.5 to 7, inter alia stating that the grant of membership of the Society to them would be considered only upon their surrender of the common terrace and open spaces, including the society’s parking areas, which they had allegedly encroached upon without due authority.

6. In the backdrop of the aforesaid communication, on 28th May 2021, respondent Nos.5 to 7 preferred an application before the learned Deputy Registrar, Co-operative Societies, seeking audit of the affairs of the petitioner-Society and further praying for the appointment of an administrator. Pursuant thereto, on 20th August 2021, an audit report came to be submitted to the Deputy Registrar; however, it is the petitioners’ specific grievance that no copy of the said audit report was furnished or served upon them. Subsequently, on 14th September 2021, the Deputy Registrar invoked powers under Section 77A of the MCS Act and appointed an Administrator to manage the affairs of the petitioner-Society. Being aggrieved by the said appointment, the petitioners preferred an appeal, which, as on the date of filing the present petition, is stated to be pending adjudication.

7. Thereafter, in the year 2021, respondent Nos.4 to 7 initiated yet another proceeding by filing an application before the competent authority seeking deregistration of the petitioner- Society. The said application came to be allowed by the concerned authority by order dated 17th April 2022, whereby the registration of the petitioner-Society was cancelled. Being dissatisfied and aggrieved by the said order, the petitioners approached this Court by filing Writ Petition No. 6883 of 2022. This Court, by its order dated 20th August 2022, disposed of the said writ petition with a direction to the concerned Minister for Co-operation, Government of Maharashtra, to grant an opportunity of hearing to all concerned parties and to decide the matter afresh on its own merits.

8. In compliance with the said directions, the Minister for Co- operation, after affording an opportunity